Telus dials up TV service
Telecom giant joins battle for bundled services with television offering
Cable and satellite television providers — locked in a heated battle for the hearts and wallets of couch potatoes — now face a new digital enemy in the multi-channel universe: the humble telephone wire.
Telus Communications is dialling in to more than 200 channels and spending $600 million to beef up its broadband network to allow for high-definition TV in many core Calgary neighborhoods. Basic channels cost $22 and five theme packs are an additional $25. Add a six-pack of movie channels and the total monthly bill comes in at about $63 a month plus tax.
There’s one caveat — you have to be a Telus high-speed Internet subscriber.
“The phone allows us, with the technology advancements that have taken place in the last decade, to have a phone conversation, surf the web and watch TV,” said Fred Di Blasio, vice-president of content and enhanced services for Telus.
Programming options range from Canadian and U.S. favourites to specialty sports, culture and movies as well as children and adult entertainment. Individual channels — such as BBCCanada, MenTVor Animal Planet — can be added on to any theme pack for $2 each a month.
“In our world, you get to pick and choose: You’ve got a basic package and you can add theme packs specific to your interest, whether it’s news, enter- tainment of cartoons,” said Di Blasio.
Telus TV is the latest weapon in the telecom giant’s arsenal as it battles with Shaw Communications over supplying everything from Hollywood blockbusters to Internet use to home phone service.
The company is no stranger to television. Several years ago, the telecom giant delivered full cable service to a select group of customers in Calgary's Lake Bonavista district. Ninety per cent of users said they wanted to keep the service, but Telus pulled the plug, citing economic reasons.
After years of quietly testing the technology with employees and their families, the technology is now ready to go — and boasts a number of different features to standard cable.
Viewers can watch a favourite program, for instance, while tuning into something unrelated, whether it’s the latest ski conditions in Banff or the hockey game.
“If I’m watching Canadian Idol and I flip over to channel one, I can still get the live linear feed of what Iwas watching in the up- per right hand corner, but in addition to that I can check the weather,” says Di Blasio. “It’s a pretty unique and interactive element that is distinct from any other provider out there.”
Cable firms like Shaw have already made impressive headway stealing clients from their telecom rivals. In 2006, conventional residential lines saw their largest year-over-year decline since they began a downward slide in 2001— a trend attributable in no small part to Shaw’s 2005 launch of digital phone.
Both industries are moving into each other’s markets, trying to lock in clients by selling them phone, Internet and TV services — a trio of products known in industry parlance as the “triple play.”
Both industries are moving into each other’s markets, trying to lock in clients by selling them phone, Internet and TVservices — a trio of products known in industry parlance as the “triple play.”
At stake is the ability to secure a customer’s loyalty by acting as a one-stop shop for entertainment, suggests Jeff Leiper, a consultant with the technology research firm the Yankee Group in Canada.
The theory is that by offering multiple services together at a cheaper rate, customers will be less likely to jump to a competitor.
“It’s entirely about bundle pricing,” Leiper said.
“The cable companies have been very successful in ramping up voice subscribers and winning them away from the telcos because when you combine your Internet access, your television and your regular telephone, you get a significant discount.”
Many of these services — including wireless phone connectivity for the “quadruple play” — are high margin products, that when sold as a package, may help Telus stem the loss of dwindling long-distance revenues and home-phone defections.
In the U.S., major telephone companies like Verizon and AT&Tare investing billions of dollars to roll out hundreds of digital TV channels, broadband Web access and Internet-based phone services to the front door of customers in a bid to compete with cable TV providers.
In 2002, SaskTel became Canada’s first major carrier — and one of the first in the world — to launch a TV offering. Dubbed “Max” it included movie titles from all the major studios, 150 digital channels, 45 commercial-free music channels and onscreen caller ID.
With Telus, Bell Canada, MTS Allstreamand Aliant eager to catch up to SaskTel’s early lead, the market could see explosive growth. A study byThe SeaBoard Group suggests that Canadian telephone carriers could have more than 800,000 subscribers by the end of 2008 — or 12 per cent of the total TV subscription market in Canada.
Such gains will be necessary if companies like Telus are to be better positioned than cable rivals to deliver these services to consumers. Each carrier faces its own unique set of issues around deployment, whether its network speed or geographic hurdles.
In Telus’s case, critics point to the fact the company has yet to roll out high-definition (HDTV) channels — despite the fact that almost half of all television sets offer the capability and the technology has been touted as the most innovative addition to television since the advent of the colour screen.
HDTV is coming next year, Telus insists. Unfortunately, argues Leiper, some upscale customers will be unwilling to wait. “It’s a temporary disadvantage — but it’s still a disadvantage. I think we’re looking at HDTV being the best-selling digital toy this Christmas, and that could handicap (Telus) because the cable company doesn’t currently face the same constraint.”
For Telus, the launch of television is part of a long-term strategy to offer the total consumer package, whether it is Internetbased home security, cellphone coverage or broadband web services. The idea isn’t to be cheaper than the competition — but to design products that are unique to anything currently on the market, says Di Blasio.
“We try to solve problems and add value to people’s lives. That doesn’t mean competing on price, but making sure that what is offered is timely, relevant and future friendly.”
JEFF LEIPER, THE YANKEE GROUP
In 2002, SaskTel became Canada’s first major telephone carrier to launch a TV offering that included movie titles, such as Alfie, starring Jude Law, from all the major studios.